“Against that background, therefore, it is inevitable that the board is extremely cautious in its outlook, particularly when the profits achieved for the year to 29 January 2011 are effectively rebased purely as a result of the impact of increased VAT.”

JD Sports, which last month decided against bidding for struggling rival JJB Sports, is paying a total dividend of 23p, up 28 per cent.

Analysts at Investec said JD Sports “positively surprised” with the results. However, it warned: “Management is highlighting the difficulty of passing on VAT and cost increases to its customers, so we are cutting full-year forecasts by £9m to £72m.

The retailer opened 28 stores and refurbished a further 24 in the year to January 2011.